Biden announces new areas of US cooperation with China

President Joe Biden announced new international cooperation efforts with China following a summit with Chinese President Xi Jinping Wednesday.

The two countries will cooperate to reduce fentanyl propagation, reestablish military contact, and begin a new dialogue on the management of artificial intelligence, Biden said in remarks on Wednesday evening.

"A lot of people are dying. More people in the United States between the ages of 18-49 die from fentanyl than from guns, car accidents or any other cause, period," President Biden said when announcing the new fentanyl response. "Today, with this new understanding, we're taking action to significantly reduce the flow of precursor chemicals and pill presses from China to the Western Hemisphere. It's going to save lives."

A U.S. administration official, speaking to reporters on condition of anonymity, said the agreement on fentanyl was the most important development to come from the summit, because a crackdown on supplies would set South American drug dealers back.

President Xi also used the meeting to call on the U.S. to stop its arming of Taiwan, according to a statement released by state broadcaster China Central Television.

Xi called the approach to Taiwan "the most important and most sensitive issue" between China and the U.S.

President Joe Biden met with Chinese President Xi Jinping in the San Francisco Bay Area amid efforts to stabilize a divisive U.S.-China relationship, while at the same time showcasing deepening economic ties with the Asia-Pacific region at a major summit for Pacific Rim economies.

Both leaders arrived in California Wednesday. Xi was greeted by U.S. Treasury Secretary Janet Yellen on arrival, which is indicative of the high level of diplomacy between Washington and Beijing that paved the way for the meeting.

It marks the first interaction in a year for President Biden and Xi, who have a relationship going back more than a decade to their time as second in command, as the U.S. and China have seen strained relations marked by military tension and economic disputes.

The meeting took place at Filoli, a historic preservation site south of San Francisco known for its museum, mansion and gardens, The Associated Press reported.

The meeting was aimed at helping stabilize the relationship, with difficult issues on the table. It's significant not only for the shape that relationship takes going forward, but for both domestic audiences and other Asia-Pacific nations.

President Biden outlined a goal of communication moving forward: "To get back on a normal course of corresponding, being able to pick up the phone and talk to one another if there is a crisis, being able to make sure our military still have contact with one another," President Biden said.

Senior administration officials do not believe the meeting marks a change in approach to China, but that it is pivotal to managing competition.

"The most important thing is that this is a complex relationship, a competitive relationship that could easily veer into conflict or confrontation if it's not well managed. And so managing the relationship in an effective way is the single most important responsibility of the president and everyone who works for him on this file," said White House National Security Adviser Jake Sullivan in a briefing with reporters.

The discovery of a Chinese surveillance balloon over the U.S. the military shot down derailed the relationship earlier in the year, leading U.S. Secretary of State Antony Blinken to postpone a visit to Beijing. But a series of high-level engagements between Beijing and Washington during the last several months teed up the meeting, with visits to the People's Republic of China from Yellen, Secretary Gina Raimondo and Blinken, and with the PRC finally returning the engagements with a visit from its foreign minister to meet with top leaders, including President Biden, last month.

Ahead of APEC, China's ambassador to the U.S., Xie Feng, said that U.S.-China relations had "suffered from serious difficulties in the past few years and hit the lowest point since the establishment of diplomatic ties," but that there had been signs of a more stable relationship.

"The question, really, on the table: Is China seeking these set steps for tactical or short-term measures, or are they seeking to truly improve relations with the United States and other allies and partners? And we're going to interrogate those assumptions closely and clearly," senior administration officials said to reporters, granted anonymity to preview the engagement.

Top issues for US as President Biden meets with China's Xi

Top issues for US as President Biden meets with China's Xi

The two leaders will meet Wednesday in California on the sidelines of a summit of Asian-Pacific leaders.

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The leaders were expected to address areas of disagreement, including provocations in the South China Sea and cross-trade issues; global issues including the Israel-Hamas war and Russia's invasion of Ukraine; those wrongfully detained; and economic disagreements.

A major objective President Biden was expected to press on was re-establishing military-to-military communication, something China shut down following then-Speaker Nancy Pelosi's visit to Taiwan last year. There were little avenues to communicate with the Chinese when the balloon traversed the U.S., the official said. Senior administration officials define this as comprehensive interactions that allow dialogues for the secretary of Defense, commanders and operators with their counterparts.

"I do think there are some mechanisms that were used during the Cold War, that some of those could be repurposed to ensure that when U.S. and Chinese forces are operating in closer proximity, we have greater confidence that in a crisis or if there's inadvertence, there would be the ability to communicate. We think that's responsible," said a senior administration official.

In the last month, China's attempts to claim international waterways in the South China Sea have led to skirmishes. Chinese ships reportedly encircled the Philippines, in continued dispute over the Second Thomas Shoal, after a previous run-in with a Philippine resupply vessel. This prompted the U.S. to reaffirm its defense commitment with the Philippines, with the State Department stating this week the treaty "extends to armed attacks on Philippine armed forces, public vessels, or aircraft — including those of its Coast Guard — anywhere in the South China Sea." The U.S. Indo-Pacific Command also said the PRC conducted an intercept of a U.S. aircraft in international airspace, coming within 10 feet of the aircraft, in another example of DOD warnings about unsafe behavior.

Meanwhile, China has been looking for the U.S. to change its stance on Taiwan, with its ministry of foreign affairs spokesperson calling for the U.S. to "honor its commitment to one China and oppose 'Taiwan independence' with concrete actions." The U.S. has maintained a One China policy, while President Biden was expected to underscore a position of keeping peace and stability. The meeting came ahead of Taiwan's elections next year.

"We've been clear publicly and privately that interference in the Taiwan election is something we're extremely concerned about. And of course, we'll plan on delivering that message again," senior administration officials said.

The meeting came as President Biden deals with several global conflicts, including Russia's war in Ukraine and Israel's war with Hamas in Gaza, factors in discussions both with Xi and other countries at APEC. The U.S. has remained concerned over Chinese entities' support for the Russian defense industrial base. Meanwhile, President Biden is facing increasing international pressure amid calls for a cease-fire, which the U.S. has not supported in Israel's war against Hamas in Gaza, and attacks on U.S. forces in Iraq and Syria from Iranian-backed groups as it tries to keep the conflict from spreading.

"We have made clear to the Chinese, who have built stronger ties with the Iranians, that it is essential that they weigh in to make clear that any escalation meant forcibly by the United States and to urge the leaders in Tehran to not spur elements in the region," said a senior administration official.

Officials also indicate a common area in addressing fentanyl, believing China has taken the issue seriously.

"I think they are going to try and I think largely succeed if a few things fall into place, with emphasizing that the United States is a Pacific power, and that we are committed to our engagement out there. And not only in the security realm, which everyone is sort of familiar with, but also in economics, which is what APEC is really about," said Matthew Goodman, director of the Geoeconomics Center at the Council on Foreign Relations and a former White House official under the Bush and Obama administrations.

APEC

The economies hold significant impact, with members accounting for nearly half of global trade and around 60% of the global GDP.

The Asia-Pacific Economic Cooperation started in 1989 in Australia, but has grown to 21 economies along the Pacific Rim. The summit brings together government, economic and private sector leaders to San Francisco, estimated to have an economic impact of around $50 million for the city.

The U.S. has laid out a theme for the summit of "creating a resilient and sustainable future for all" with priorities on initiatives on energy goals, climate and gender equity-focused plans, and anti-corruption.

"The climate crisis is exacerbating natural disasters and fueling extreme temperatures, upending supply chains, destroying crops. Russia's invasion of Ukraine has further undermined food and energy security. So we have to meet this moment head-on. That's why the United States chose to focus our host here on creating a resilient and sustainable future for all," Blinken said at the APEC ministerial opening.

President Biden was expected to make the case that his economic plan is beneficial for the U.S. and its partners, as the administration touts its recovery, cooling inflation and lower unemployment; and more ties in the region. The U.S. will show its economic and commercial engagement, highlight the investment ties and signal commitment to the region, according to a senior administration official.

Asia-Pacific influence

Both the U.S. and China have sought more ties in the region.

China has touted its Belt and Road initiative and written off criticisms of the program. China previously announced it would build a connectivity network and speed up a China-Europe railway, pilot zones for Silk Road e-commerce and more financing.

"There's a lot of questions around the financing side of things. When you look at the debt sustainability issue, China, about 60% of Belt and Road initiative recipient countries, are in some sort of debt distress. And that's a real concern, especially as China's economy is also in a bit of distress itself. But the U.S. has been hard-pressed to present an alternative, and a viable alternative, to provide the infrastructure and the financing to provide the necessary roads, ports and airports. And countries still want Chinese financing. They want those projects," said Erin Murphy, a senior fellow with the Asia program at the Center for Strategic and International Studies.

The Biden administration has focused on a security partnership with Australia and the U.K., the trilateral relationship with Japan and South Korea, moved relations forward with Vietnam and hosted Indonesia's president at the White House ahead of APEC  in which the leaders upgraded the relationship to a comprehensive strategic partnership.

The U.S. has also highlighted a G7 initiative to help infrastructure financing for developing countries, the Partnership for Global Infrastructure and Investment. The Biden administration also launched the Indo Pacific Economic Framework. It follows the U.S. withdrawal from the Trans Pacific Partnership under Trump.

"Indonesia is really pushing for more effort to be done on critical minerals, either through IPEF through APEC or another way through partnerships. So I think that you're going to see a lot of push-pull there," said Murphy.

IPEF

IPEF is a framework that has negotiations centered on trade, supply chains, clean economy and fair economy. Its aim is to promote sustainable economic growth with the 14 partners, who make up about 40% of the global GDP. What progress is made in the framework will be closely watched.

Raimondo and U.S. Trade Representative Katherine Tai hosted the third Indo Pacific Economic Framework for Prosperity ministerial meeting against the backdrop of APEC. In launching the negotiating process last year, the U.S. said the lessons from the TPP informed IPEF.

In September, the Department of Commerce published text for an IPEF supply chain agreement, including the formation of an IPEF supply chain council, IPEF supply chain crisis response network and IPEF labor rights advisory board.

But questions remain on what substantial progress is made as the U.S. works to iron out an agreement with Indo-Pacific nations.

"My understanding is that very substantial progress has been made on three of the four pillars, and on the trade pillar there has also been negotiations taking place for quite some time that there's been significant progress, but it looks not to be complete," Yellen said.

U.S.-China economic relations

There have been economic disputes between the U.S. and China.

The U.S. has undertaken economic actions defined in the interest of national security. These have included updating export controls on advanced computing semiconductors and limiting some foreign investment in critical technology against entities in the PRC accused of violating export controls to aid Russia's defense industrial base; and further regulation of some outbound investments related to semiconductors, quantum information technology and artificial intelligence systems.

President Biden has also left in place many of the tariffs imposed on Chinese imports under the Trump administration. They were imposed after the U.S. found "unfair and harmful conduct" under the trade act. While the Trump administration reached a trade deal with China just ahead of the pandemic, some of the agreements have not been fully implemented. Data from the Peterson Institute for International Economics found at the end of the two-year period China hadn't purchased half of U.S. exports it had agreed to.

The administration has also raised concerns over China's state-led non-market approach, coercion, export controls on critical minerals, fair treatment of U.S. firms and Chinese entities' support for Russia's defense base. Yellen said she shared the concerns with PRC leaders, including the vice premier, in meetings ahead of APEC, but also laid out areas for more cooperation, including on climate, the debt infrastructure and strengthening multilateral financial institutions.

But China has often criticized the U.S. for actions it views as restrictive of its development.

"We're not trying to decouple from China, but what we're trying to do is change the relationship for the better. From my perspective, if in fact the Chinese people who are in trouble right now economically, if the average homeowner or the average citizen in China was able to have a decent-paying job, that benefits them and benefits all of us. But I'm not going to continue to sustain the support for positions where if we want to invest in China, we have to turn over all our trade secrets," President Biden said.

But as China has faced its own economic turmoil, something President Biden previously called a "ticking time bomb," APEC will mark a moment for both countries to showcase their economic agendas.

Officials say they believe Xi is looking to send a positive message for investment in China, while President Biden is looking to show the U.S. role in the Asia-Pacific as an investment and trade partner.